Latest Housing Prices Australia News indicates that the Australian housing market is on the verge of a “volatile” price upheaval, as imminent interest rate hikes and COVID-19 restrictions threaten to bring the current real estate boom to an end. According to senior experts at industry research firm IBISWorld, Australian house values would drop by 5.2 percent in 2022-23, with some areas such as Sydney’s inner suburbs expected to drop by as much as 9.2 percent.
Housing Prices Australia Expected to Decline 2022 – 2023 For Multiple Reasons
After soaring by 18.1% in 2021-22, the highest yearly increase in Australian history, the forecasted drop comes as a welcome relief to the scores of potential buyers wanting to secure an affordable property. Sadly for many people, the opportunity to buy a home during the most recent housing price bubble Australia wide has been an impossible undertaking due to job uncertainty due to the impact of Covid, overall rising living costs including an increase in property prices and rising rents.
We saw the lifting of many Covid restrictions of late as the country embraces a ‘new normal’— a far cry from life as we knew it prior to the pandemic but one that at least enables lots of people to return to some sense of freedom as the country heads for herd immunity through multiple doses of vaccines, social distancing, self-isolation for anyone with symptoms and/or testing positive, as well as strict lockdowns where outbreaks had occured.
Following the largest annual increase in history, Australian house prices are expected to decline in the coming year. The property market faces a variety of challenges, according to Matthew Reeves, a senior industry analyst at IBISWorld with a wide range of issues having contributed to the gloomy prognosis for property values including monetary policy, the COVID-19 pandemic’s consequences, a loss of consumer and investor confidence as a result of the Russia-Ukraine crisis, and a hangover from recent soaring home prices.
The housing market will be relieved by looming interest rate hikes and rising living costs. The Reserve Bank of Australia lowered the cash rate to 0.1 percent in concern that COVID-19 would carve an unrecoverable path through the economy, which has been blamed for much of Australia’s property boom.
Now, with rising inflation, the central bank may be obliged to raise rates sooner than many homebuyers anticipated during the pandemic’s peak. [Pressure from other international reserve banks may drive the RBA to raise the cash rate in 2021-22, but more likely in 2022-23,] said Mr. Reeves.
Looming Australian Housing Market Crash = More Affordable Housing?
Previous government-based housing incentives for home buyers included the Home Building Grant, Regional Grants, and the First Home Buyers Grant (ongoing) in efforts to assist the building industry in a time of crisis. Anyone wanting to buy property was encouraged to build a new home, with combined grants totaling $45,000 which allowed first-time homebuyers a clear advantage to enter the property market.
With increased building costs and material delays, fewer people are taking advantage of the First Home Owners Grant nowadays, instead choosing to wait it out. Likewise, the increasing record-high housing prices Australia is seeing are taking their toll. According to IBISWorld, interest rates will grow at a 0.27 percentage point annual rate to 1.45% in 2026-27. Rising mortgage rates will almost certainly be exacerbated by tighter lending requirements, the analysts predict.
[This is thanks to the Banking Royal Commission, which imposed better lending criteria for low-income borrowers. Borrowers are more susceptible to tiny changes in interest rates during high levels of family debt, and debt stress could induce a decrease in housing prices,] according to the report.
What About Hervey Bay? Will House Prices Drop in 2022? Will There be Brighter Days Ahead?
How the housing prices Australia predictions will affect Fraser Coast Hervey Bay property prices is yet to be seen, although there is every chance that we too will see a substantial decrease in property prices as both investors and homeowners face financial pressures incurred due to interest rate hikes. If interest rates do increase and lending criteria tighten up, no doubt as the supply chain of homes coming on to the market also increases, it is highly likely that we will see the property market change from a seller’s market to that of a buyers’ market which will result in lower house prices in the area.
Housing Prices Australia. Hervey Bay Property Prices. Will House Prices Drop in 2022?
We will have to patiently wait to see if there are any new government grants or assistance packages to help with buying a home in the coming year or so. Hopefully, as job vacancies decrease and more people find sustainable work enabling them to adequately provide for their families; things will turn around all across the country. For Hervey Bay residents that are fortunate enough to call the region home, we know that we are truly the lucky ones that live in paradise.
Have a Hervey Bay or Maryborough Property you’d like to sell? We can help with our Pay on Success Guarantee. Get In Touch With Our No Risk No Sale No Fee Estate Agents
If you’d like to know more about our no sale no fee real estate offer or would like a free appraisal we’re here to help. Phone our office on 07 4125 6692 or senior broker Brian Thompson on 0438 132 215 or get in touch via the form button below. Our other recommended no sale no fee estate agents are Sean Coulton Maryborough ph: 0447 389 260 and Tina Bettles Hervey Bay ph: 0481 158 974.
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